Abstract: Minimum wage increases often result in spillovers above the strict minimum wage cutoff, however the mechanism behind these spillovers is not well understood. Using establishment-level panel data from the Occupational Employment and Wage Statistics program, I estimate the effect of minimum wage increases implemented by 10 states in 2014 and 2015 on establishment wage and occupational structures. I show that minimum wage increases lead to wage spillovers within establishments. I find no evidence that minimum wage increases induce establishments to reorganize their occupational structure across major occupational groups, however I find it does lead to a 1% increase in reallocation within 2 digit occupations. I investigate opening and closing establishments, and find that minimum wage increases induce closures by establishments with a larger share of employment in clerical, production, and service occupations and a smaller share in professional and computer-related occupations. However, opening and closing establishments do not exhibit any selection on wage structure or establishment size. Finally, I find that minimum wage increases propagate up the management hierarchy, leading to increased wages for supervisors. Nonetheless, I find overall wage inequality decreases within establishments after minimum wage increases.
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